Machinery Breakdown Insurance does not cover every reason that machinery stops working.

The cover is generally designed around certain sudden and unforeseen mechanical or electrical breakdowns.

What can be excluded? #

Depending on the policy, exclusions can include:

• Wear and tear.
• Gradual deterioration.
• Corrosion.
• Rust.
• Erosion.
• Normal maintenance.
• Known defects.
• Faults existing before the policy commenced.
• Consumable parts in some circumstances.
• Damage caused by excluded external events.

The actual exclusions vary between policies.

What about machinery simply reaching the end of its life? #

Insurance is not intended to replace routine asset replacement.

Where machinery fails because it has gradually worn out through normal use, the cost may not be covered.

Does poor maintenance affect a claim? #

It can.

Businesses are expected to maintain machinery appropriately.

Insurers may consider:

• Manufacturer servicing requirements.
• Maintenance records.
• Known faults.
• Previous breakdowns.
• Whether recommended repairs were completed.

What if an external event damages the machinery? #

Damage caused by an external event such as fire, storm or impact may fall under the Property section of the insurance rather than Machinery Breakdown.

The circumstances need to be assessed against the relevant policy sections.

Should old machinery still be disclosed? #

Yes.

The age, type and condition of important machinery can affect underwriting.

Insurers may apply particular conditions or limits to older or difficult-to-replace machinery.